GE's green gold mine

GE "is by far the most dramatic example of the green revolution that is quietly transforming businesses around the world." The Washington Post once commented on General Electric's "Green Ideas". As an enterprise that provides products and services for infrastructure, GE has appeared in basic industries such as energy, electricity, water resources, and transportation, and its changes have an impact that affects the whole body.

However, for Jeff Immelt, GE's global CEO, this is not only a corporate responsibility, but a potential business opportunity. He once explained: "Greenmagination is GE's global growth strategy, which uses advanced technology to help us meet the challenges of today's society, support our customers, and continue to improve our financial performance. No matter where, use technology Solving problems always makes for good business."

In May 2005, he announced what has come to be known as one of GE's most successful cross-business, cross-industry strategies in recent years, "Green Ideas." Since then, the phrase "Green is green" (green is profit) has been frequently mentioned by him, which also means that the core of "Green Ideas" is profit. From the original four promises of "Green Innovation" to the current five, "Increasing Revenue from Greenmagination Products" has been there since the beginning. GE also has a pretty good report card, with revenue from Greenmagination products and services of $10.1 billion in 2005, $21 billion in 2011, and total revenue since 2005 of $105 billion.

For GE, Greenmagination is a high-growth business plan for the enterprise. Deng Qun, director of GE (China) Green Vision, revealed that its internal survey data shows that the growth rate of "Green Vision" products in the global market is twice that of other products. Xia Zhicheng, President and CEO of GE China, specially emphasized that "Green Vision" products do not enjoy special treatment. Like other products, they need to undergo strict commercial approval. After passing the test, GE will invest money for development and promotion.

Lorraine Bolsinger, GE's first "Greenmagination" vice president, once said that a product that obtains a "Greenmagination" ID card must have two characteristics at the same time, and meet two conditions, namely, significantly improve the customer's business performance and Measurable and measurable to significantly improve the client's environmental performance. Even if it's a really great green technology, if it's not viable, GE will say "no" to it because it's not ready to be a "green idea" product, she said.

Moreover, in order to make such audits credible, GE has brought in a third-party evaluation company throughout the certification process to jointly develop a set of certifications and standards for "Green Vision" products. By comparing similar products, historical performance, etc., GE was able to quantify relevant reference indicators, analyze the environmental attributes of each product, and measure the environmental benefits of each product, so as to obtain a clear score table. When Greenmagination first started in 2005, GE selected only 17 Greenmagination products from among its thousands. Deng Qun pointed out that, fundamentally, GE is still a company with the most efficient use of capital.

In addition to operating strictly in accordance with business rules, the success of "Green Ideas" lies in its openness innovation, especially its “Green Challenge”, an open clean energy innovation competition. The campaign was first launched in the US in 2010 and landed in China in 2011. Xia Zhicheng pointed out that although GE has great scientists and engineers, it cannot do all innovations, especially in the face of increasingly complex environmental problems, open innovation is very important, in fact, GE has also gained a good effect.

According to statistics, as of last year, the Green Challenge has reviewed 5,000 business plans and ideas in the United States, GE acquired one participating company, conducted 22 investment and business cooperation projects, and launched 10 companies. Participating companies and inventors at the stage provided funds, and accumulated investment agreements and business cooperation agreements with a total value of 134 million US dollars. In the "Green Challenge", GE also joined venture capital institutions that have been immersed in related fields for many years to participate in related investment and cooperation.

Henry Chesbrough, a professor at the Haas School of Business at the University of Berkeley, believes that this kind of open innovation by GE not only connects the activities and practices between enterprises, but also brings together experts, customers and consumers with the same interests. Together, a new type of innovation community has been constructed. It is understood that with the help of the "Green Challenge", GE has established a community of innovators spanning more than 150 countries with a total population of more than 74,000.

Business finally pushes green

Xia Zhicheng was not surprised when Jeff Immelt proposed "Green Ideas", on the contrary he "liked this strategy very much". Having worked at GE for 18 years, in his view, "Green Ideas" summarizes GE's consistent way of doing things and attitude towards sustainable development, which is a good way to explain GE. In fact, GE's employees and customers quickly grasped the essence of "green ideas" because that's what GE has been doing.

CEConline: "Green Ideas" is considered to be a very successful strategy for companies to face environmental challenges. From your own understanding, what is the key to the success of this strategy?

Xia Zhicheng: I think the key is how to make technology more beneficial to the environment. For example, in China we use technology to solve increasingly serious environmental problems, and launch aircraft engines with lower emissions and noise, as well as more efficient and less polluting aircraft engines. generator, etc. Furthermore, the creation of Green Ideas ensures that what GE is doing is easier to understand both inside and outside the business.

Actually, "Green Ideas" isn't a new concept at GE, we've always done it. It's not a marketing slogan, it's everything we do.

CEConline: In 2011, GE's sales were $147 billion, of which $21 billion came from Greenmagination products and services, or less than 15 percent. How does GE allocate resources for Greenmagination and other businesses and products?

Xia Zhicheng: We invest 6% of our annual industrial revenue in R&D, a considerable part of which is related to "Green Ideas". However, we have very strict evaluation standards for "Green Creation" products. In fact, compared with other products, the products of "Green Ideas" have no special status. Everyone enjoys the same treatment and faces the same rules of the game.

CEConline: The importance of "Green Ideas" to GE is self-evident. Why doesn't GE set up a special department for this?

Xia Zhicheng: Indeed, we do not have a dedicated department responsible for the products and services of "Green Vision". We have only a small team in the world and in China. Their work is mainly to coordinate and promote various business departments. Because, the biggest driving force for "Green Ideas" to move forward ultimately comes from the business sector.

CEConline: GE once said that "the Chinese market is the key to the success or failure of the global 'Green Ideas'", why?

Xia Zhicheng: If you break down "Green Ideas", it means three things, one is the philosophy behind the technology, which is the leading idea of "Green Ideas"; the second is localization, to understand local needs, Make our global solutions better locally; the third is innovation for this purpose. This is what GE teams around the world are doing, and we are a part of it. In a sense, China's environmental problems are the biggest problems that need to be solved in the future. If we are successful in this market, then the world will be successful too.

CEConline: In 2011, GE earned $21 billion in revenue from Greenmagination products and services, and $1 billion in revenue in China. Is it harder to embrace Greenmagination products and services?

Xia Zhicheng: We will encounter many challenges in China. The biggest challenge is the awareness of customers. Not all customers have such a vision. Chinese customers will pay more attention to the initial cost of the product, rather than the entire product life cycle. We will tell customers to look at the cost benefits in the life cycle of the product, plus the corresponding environmental benefits, it is meaningful.

In Wuhan, for example, people always find a lot of smoking chimneys. In 2007, we provided Wuhan Iron and Steel with two sets of 9E gas-steam combined cycle power generation equipment for blast furnace gas power generation, with a total installed capacity of 320 megawatts and an annual power generation of 2.4 billion kWh. Calculated at 0.5 yuan per kWh, the annual electricity bill can be saved 1.2 billion. Moreover, Wuhan Iron and Steel has also greatly reduced the emission of blast furnace gas, a common waste gas in steelmaking, making daily production more green and environmentally friendly. These are beneficial to Wuhan Iron and Steel in the long run.

Wuhan Iron & Steel's project was done a few years ago, and they were relatively ahead, and it was indeed relatively rare at that time. But now, there are more and more customers with such awareness, and it takes time for everyone to catch up. Of course, cooperation with the government plays a big role in this.

CEConline: How to localize "Green Ideas" in China?

Xia Zhicheng: We have a R&D strategy of "in China, for China", which is mainly used to develop cleaner products and solutions for Chinese customers. This is a very large program. We set aside special funds and invest a lot of money to develop and design products according to the local needs of Chinese customers. For example, our new light-duty gas turbine, which has been improved and designed according to China's needs, can be used in the field of landfill gas power generation in China. Every year, GE invests a considerable portion of its R&D funds into R&D projects set up in accordance with China's local needs. Half of these funds are invested in projects related to "Green Ideas".

CEConline: In terms of product innovation, how does GE integrate with customer needs, that is, how to make "Green Vision" products and services have broader commercial value?

Xia Zhicheng: For example, we have established customer innovation centers in Chengdu and Xi'an, where not only GE scientists, engineers, product managers and marketing personnel, but more importantly, we invite customers to participate in our research and development. This is what we call "joint value creation". Customer input is very important, and they are involved from the very beginning of product development, and their input permeates every step of the development process. In addition to inviting customers to come, we also have to go to the customer's side. Just like the R&D personnel who develop water treatment solutions for the petrochemical industry in our R&D center, they are basically not in the office, but stay in the petrochemical plant. In short, innovation is impossible in a closed vacuum environment.